No tax on bank balances, only transfers attract N50 — CITN

No Tax on Bank Balances, Only Transfers Attract ₦50 -CITN

The Chartered Institute of Taxation of Nigeria (CITN) has clarified that bank balances are not subject to taxation under Nigeria’s current tax regime. Only electronic transfers attract a ₦50 stamp duty, dispelling widespread misconceptions that funds kept in accounts would be taxed.  

In recent weeks, concerns have spread among Nigerians regarding alleged taxation of money held in bank accounts. These fears were addressed by Mr. Ben Enamudu, Chairman of the CITN Abuja District, during an interview with ARISE News. 

He emphasized that there is no provision in Nigerian tax laws for taxing bank balances. According to him, the narrative suggesting otherwise is misleading and has caused unnecessary anxiety among account holders.  

Enamudu explained that the ₦50 charge applied to certain transactions is not a tax on deposits or balances but rather a stamp duty. This duty is triggered when an individual makes an electronic transfer from one account to another. Importantly, he noted that if a person maintains multiple accounts within the same bank, transfers between those accounts do not attract the ₦50 charge. The duty applies strictly to transfers made to third parties.  

The CITN chairman further highlighted that the reforms are designed to protect low-income earners. He stressed that misinformation about income thresholds and bank transfers has fueled confusion, but the reality is that the government’s tax framework does not impose levies on savings or account balances. Instead, the focus remains on regulating electronic transactions through the stamp duty mechanism.  

This clarification is significant because it reassures Nigerians that their savings are secure from direct taxation. The ₦50 stamp duty is a fixed charge, not a percentage of the transfer amount, meaning that whether one transfers ₦1,000 or ₦1,000,000, the duty remains the same.

This structure ensures predictability and prevents disproportionate burdens on individuals making smaller transfers.  

The CITN’s intervention also underscores the importance of public awareness and accurate information in financial matters. Misinterpretations of tax reforms can lead to panic, reduced trust in financial institutions, and reluctance to engage in banking services.

By clarifying the scope of the stamp duty, the institute aims to restore confidence and encourage continued participation in the formal banking sector.  

Nigerians can rest assured that their bank balances are not taxed under current laws. The only applicable charge is the ₦50 stamp duty on electronic transfers to third parties, a measure intended to streamline revenue collection without penalizing savings.

The CITN’s statement serves as a reminder that transparency and communication are vital in maintaining trust between citizens, financial institutions, and the government.